inflating, on 21 June 2011 - 06:45 PM, said:
Paul Fisher at the Bank of England hints at more money printing to keep deflation at bay (by deflation, he must be talking about property in some areas or referring to large screen televisions, as I can't think of much else that's going down in price across the UK)
He's talking about asset prices. I suppose this includes houses, but more importantly, it relates to keeping gilt prices high, which is the same as saying keep interest rates down.
If the plan of the BoE were to inflate away HM Government's debt, who would want to buy debt from the DMO in the future having seen what the BoE did this time?
Somebody who wants to get most of their money back?
AFAIK only a minority of HMG debt is not index-linked, this means they can only inflate some (that minority) of the debt away. Am I mistaken, is it vice versa? Or will they inflate and fiddle the indexes?
I'm pretty sure it's the other way round, but it doesn't really matter. QE is not designed to cause (a huge amount of) inflation, it is designed to allow
it. (And protect previous inflation, but I'll leave that one to Injin).
They are not trying to inflate, they are trying to survive, and reset the ponzi:
Which allows the broad money supply to inflate later.
Or is simply that with QE, it matters not a jot what the Gilt markets think, because basically HMG is buying its own debt via the BoE anyway with a middle-man to keep it legal?
Pretty much. Don't forget the middle men are being paid rather well.
Finally, do you get a Knighthood these days if you pretty much halve the value of Sterling over 10 years and preside over a disastrous bubble while doing little more than stuffing your gormless face with chocolate digestives and claiming for a railcard on expenses?
IMWO, you get a knighthood if you come out the other end of this with your head on your shoulders and a functioning fiat money system.
Less credit - more money.
And I beheld a black horse; and he that sat on him had a pair of balances in his hand. And I heard a voice in the midst of the four beasts say, A measure of wheat for a days wages, and three measures of barley for a days wages; and see thou hurt not the oil and the wine.